Here's how customer service can drive retail churn

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Customer churn for retail is among the highest of all consumer industries, and poor customer service may be a large factor to blame, according to a 2017 Aspect Software study of US adults published today.

The study found that retail trailed only cable as the industry with the largest proportion of customers leaving for greener pastures. Meanwhile, online retail was the fourth-highest in terms of customers leaving.

The study also found that a significant and growing proportion of consumers over the prior year stopped doing business with a company due to poor customer service — 54% of consumers stopped doing business with a company due to bad service in 2017, versus 49% of consumers in 2016. In order to stem the bleeding, the data suggests that retailers should take a hard look at their live employees, chatbots, and self-service support channels.

Retailers must balance cost-savings with customer experience to achieve customer service nirvana. For customer returns, exchanges, and other support interactions, automated tools like chatbots or interactive voice responses (IVR) can help retailers cut down on staffing expenses — but they might also carry a hidden cost. If automated tools contribute to a lack of effectiveness, speed, or accuracy — the top three causes of frustrating customer service — that could hurt customer retention.

The worst offending channels in that regard include IVR and smart speakers like Amazon Echo, which consumers ranked among the least appealing in Aspect's study. While advances in natural language understanding steadily improve the customer experience of artificial voice and chat interfaces, retailers should build easy options for poorly served customers that allow them to transfer seamlessly to live people when necessary.